Most precious-metal stocks dropped, along with stock markets, in March 2020. They then quickly reversed that trend to climb for investors. In fact, gold soared to over $2,000 U.S. an ounce for the first time ever before falling back just below $1,800.
Still-strong gold and silver prices reflect investor fears about many things, including stock market volatility because of COVID-19 and the continuing challenges for the economy. For many investors, gold and silver represents a “safe harbour” in these turbulent times.
We expect gold and silver-loving markets in Asia and other emerging markets to rebound after the coronavirus is contained by global vaccination. That should further spur gold and silver purchases, taking precious-metal stocks even higher.
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What’s more, if inflation continues to rise over the next few years as a result of the trillions of dollar that governments have spent to counter the impact of COVID-19, these stocks will attract new interest.
We think top gold and silver stocks have much more growth to offer savvy investors. The following ETFs let you tap that growth through top-quality global miners.
ISHARES S&P/TSX GLOBAL GOLD INDEX ETFis a buy for aggressive investors.The fund(Toronto symbol XGD; buy or sell through brokers; ca.ishares.com)aims to mirror the performance of the S&P/TSX Global Gold Index; it’s made up of 50 gold stocks from Canada and around the world.
The ETF began trading on March 23, 2001. It charges investors an acceptable 0.61% MER.
The fund’s top holdings include Newmont, 20.4%; Barrick Gold, 14.8%; Franco-Nevada Corp., 11.3%; Wheaton Precious Metals, 8.1%; Agnico-Eagle Mines, 6.0%; Kirkland Lake Gold, 4.2%; and Gold Fields Ltd., 3.3%.
The ETF cuts risk for investors by focusing on politi-cally stable mining jurisdictions: Canadian firms comprise 67.3% of the fund’s assets, followed by the U.S. (24.4%) and South Africa (7.5%)
GLOBAL X SILVER MINERS ETF is also a buy for aggressive investors.The fund (New York symbol SIL; buy or sell through brokers; www.globalxfunds.com) tracks the Solactive Global Silver Miners Index.
Set up in April 2010, the ETF gives you exposure to 41 international firms that mine, refine or explore for silver. The fund has 59.0% of its assets in Canada. That’s ahead of Russia (12.2%), the U.S. (11.1%), the U.K. (5.2%), South Korea (4.9%), and Peru (4.2%). Investors in the Global X Silver Miners ETF face an acceptable MER of 0.65%.
The quality of the fund’s top holdings should drive your future gains: Wheaton Precious Metals represents 24.0% of total assets; Polymetal International, 12.3%; Pan American Silver, 9.5%; Hecla Mining, 5.6%; Korea Zinc, 4.8%; SSR Mining, 4.7%; First Majestic, 4.5%; Buenaventura, 3.6%; Fresnillo plc, 3.5%; and Coeur Mining, 3.3%.
Recommendation in Canadian Wealth Advisor: Global X Silver Miners ETF and iShares S&P/TSX Global Gold Index ETF are a buy.
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Wait, didn’t you just publish an article “Investor Warning: Theme Investing can lead you into losses” warning about the dangers of buying themed ETFs? Then you turn around and recommend two themed ETFs!
Thanks, Shiv. These ETFs offer investors diverse exposure to gold and silver miners/mining, respectively. That helps to cut risk.